Clash Punctuates Nomination Hearing

By NEIL A. LEWIS,

Published: July 15, 1994

WASHINGTON, July 14—
Judge Stephen G. Breyer completed his testimony before the Senate Judiciary Committee today but not before a sharp confrontation over whether he acted improperly in deciding pollution cases while investing in an insurance syndicate facing substantial losses over pollution lawsuits.

Judge Breyer, President Clinton's second nominee to the Supreme Court, found himself facing pointed criticism from Senator Howard M. Metzenbaum, Democrat of Ohio, over his participation as a judge in eight pollution cases while he was a member of a Lloyd's of London insurance syndicate.

For the first time in his three days in the witness chair, Judge Breyer seemed impatient as he tried to explain why he was confident that he had done nothing wrong.

The discussion grew so heated at one point that Senator Edward M. Kennedy, a Massachusetts Democrat and Judge Breyer's principal political patron, rose to his defense. Mr. Kennedy became embroiled in an argument with Senator Metzenbaum, and Senator Orrin G. Hatch of Utah, the panel's ranking Republican, joined Senator Kennedy in defending Judge Breyer. Only One Controversy

The discussion of Judge Breyer's investment in a Lloyd's syndicate has been the only point of controversy in his confirmation hearings, and he is expected to be confirmed easily as the nation's 108th Justice of the Supreme Court. Even Senator Metzenbaum, the most critical voice on the committee so far, said he would vote to confirm Judge Breyer.

The discussion of Judge Breyer's insurance investment accounted for only a small part of today's session, most of which was filled with compliments for his intellect, probity and character. Judge Breyer also spoke at length about his views on government regulation, the subject for which he is best known.

But Senator Metzenbaum asserted that it was wrong of Judge Breyer, while sitting on the Federal appeals court in Boston, to have written a 1990 opinion in a case involving the Environmental Protection Agency's efforts to clean up a toxic dump in New Hampshire. In that case, Judge Breyer upheld most of a lower court's order that the E.P.A. had gone too far in requiring a complete cleanup of the dump.

"What concerns me, Judge," Senator Metzenbaum said, "is that you decided a case that reduces polluters' and their insurance companies' liability for cleaning up hazardous waste at a time when your investment at Lloyd's of London included environmental liability insurance policies." Judge's Explanation

Judge Breyer said he had recently reviewed the case, United States v. Ottati & Goss, and remained certain that he had not violated any laws or codes of judicial conduct because there was no direct or substantial impact on any of his holdings, including those at Lloyd's.

"If I thought there was a substantial, that is, a direct effect, I would have taken myself out, and that would be the correct thing to do," he said. "If judgmentally I think that the effect is remote or speculative or contingent, then I think the thing to do is sit. And in making my judgment on that case, I concluded that any effect on my investment was remote or speculative or contingent. I think that was a correct judgment."

Nonetheless, Judge Breyer said he was sensitive to the issue that a judge should be completely free of any appearance of conflict and said he would put in place strict procedures if he was confirmed for the Supreme Court. In addition to filing the disclosure forms of financial holdings required of all justices, he said he would invite parties to litigation to contact his chambers directly, and even anonymously, if they believed he should not participate in a case.

Underlying the debate is Judge Breyer's investment in a Lloyd's syndicate in 1985. The syndicate has been suffering financial losses because it insured parties against asbestos and pollution lawsuits. Hard to Quit Lloyd's

In his first day of testimony, Judge Breyer said he would do whatever he could to end his association with the syndicate. Experts have said that might be impossible to accomplish.

When Senator Metzenbaum said Professor Geoffrey C. Hazard of the University of Pennsylvania Law School, an authority on ethics, had said it was imprudent for Judge Breyer to have invested in liability insurance, Senator Kennedy objected strongly. He said Senator Metzenbaum had distorted Professor Hazard's conclusion.

"That's different from what was stated," Mr. Kennedy contended, reading the "possibly imprudent" portion of the Hazard letter into the record. Senator Hatch agreed, stating, "It certainly is."

Senator Metzenbaum, looking startled, said: "Well, I didn't think that I was in a debate with my colleagues on this committee." Letter Is Read

Senator Kennedy, who had made a point of remaining in the hearing room for Mr. Metzenbaum's expected criticism of Judge Breyer, read Professor Hazard's exact remarks into the record:

"You have asked for my opinion on whether Judge Breyer committed a violation of judicial ethics in investing as a 'Lloyd's name' in insurance underwriting while being a Federal judge," Professor Hazard wrote in a letter to the White House. "In my opinion there was no violation of judicial ethics. In my view it was possibly imprudent for a person who is a judge to have such an investment because of the potential for possible conflict of interest and because of possible appearance of impropriety.

"However, in light of the facts, no conflict of interest or appearance of conflict materialized."

The panel met in closed session in the morning to consider any confidential accusations made against the nominee and Senator Joseph R. Biden Jr., a Democrat of Delaware who chairs the committee, said nothing significant was raised.

Senator Biden began the mandatory closed sessions for all nominees even if there was nothing to be considered in response to criticism of the way the committee handled Prof. Anita Hill's complaints of sexual harassment against Judge Clarence Thomas during the 1991 hearings on his nomination to the Court.

Senator Biden said no issue had been raised, including the one involving Lloyd's, that suggested even the remotest ethical problem for Judge Breyer.

Photo: Judge Stephen G. Breyer during questioning yesterday by Senator Howard M. Metzenbaum, Democrat of Ohio, in the last of three days of testimony in hearings on the judge's nomination to the Supreme Court. (Stephen Crowley/The New York Times)